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Posts tagged Business Ethics.

Four Design Links is a review of the design- and ethics-related stories we've been reading online this week. This week: material shortages, the financial performance of ethical companies, a color picker app, and our favorite font gets professional.

1. Material Shortages and Designing a New Material World.

A fantastic interview with Michael Braungart of the Cradle to Cradle at core77 discusses the need for designers to develop a new understanding about the materials they use and the ways in which they use them. Braungart elaborates on the role designers play in industrial transformation with respect to material selection, and the importance of making choices that are sustainable, healthy, and socially conscious.

Last week, the Atlantic reported an interesting case in business ethics.

Former HP CEO Mark Hurd was forced to step down from his post August 6 of this year on account of two violations of the company's ethical standards: the first involved a sexual harassment suit filed by a HP contractor (former reality TV actress Jodie Fisher), and the second involved the results of an internal investigation that uncovered expense-account irregularities (see also Huffington Post, NYT, Bloomberg, and HP).

The Atlantic characterizes Hurd as having had "quite a soft landing". Soft indeed: one month later, it has been announced that Hurd will be hired as the president of Oracle, the software company with the third-largest revenue in the world (after Microsoft and IBM; statistic from 2007).

This, it seems, does not speak well for the amount of concern being paid to business ethical considerations in Oracle's executive-level hiring practice. (The Atlantic, slightly more dramatically, suggests that this case might somehow "prove that business ethics don't matter".)

I now quote their interesting points in full, although again, it is worth noting that the stakes are perhaps not so high as they are set forth in the following.

While the accusations against Hurd sounded pretty bad, they boiled down to ethics. Ultimately, HP's sexual harassment probe found that he didn't violate the company's policy, but did violate its ethical standards. Oracle has responded to Hurd's poor judgment in areas other than management with a resounding -- so what? The company thinks Hurd's talent for business decision-making trumps his poor decision-making elsewhere.

Yet, in other situations, business ethics clearly do matter. It's easy to think of examples of businesses and individuals that don't recover, like Bernie Madoff and Enron. These ethical violations show something very different from Hurd's problems, however. Instead of using their superior talent and expertise, such firms or individuals must rely on fraud to bring in profits. The business community has no use for mere thievery as a means to make money. Anyone can do that; it's the brilliant minds that matter in the long-run.

So perhaps the lesson here is that business ethics only matter when they jeopardize business. Of course, sometimes these go hand-in-hand. A perfect example is Arthur Andresen. With an auditing firm, integrity is everything. If you lose that, you have no business, as the firm quickly found out. But in other businesses, where the profit motive is less connected to good ethics, that's not the case. Then, so long as poor decisions don't compromise profit, they will eventually be forgotten.

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Good news: being nice is the key to accumulating power. Bad news: once power is attained, leaders become less ethical. Jonah Lehrer's recent weekend essay in the Wall Street Journal presents the paradox of power:

The very traits that helped leaders accumulate control in the first place all but disappear once they rise to power. Instead of being polite, honest and outgoing, they become impulsive, reckless and rude. In some cases, these new habits can help a leader be more decisive and single-minded, or more likely to make choices that will be profitable regardless of their popularity.

Can ethical behavior be taught to employees, and does company culture drive employees to be less ethical?

Klaus and Associates recently published results from a survey about professional ethics. The opinions of their survey respondents are not surprising:

Although 87% of respondents believe that a lack of ethics led to the current economic disaster, there’s hope for the future: a reassuring 80% think that ethics can be taught.
Sixty-seven percent of the survey respondents pointed a finger at the profit-hungry business environment as a contributing factor to a rise in unethical behavior, with 59% agreeing that shady conduct in the workplace derives more from company culture than from individual employees....

...When asked if people have a lower standard of ethical behavior at work than they do in their personal lives, the responses were mixed: 38% disagree, 34% agree, and 29% are on the fence. These results suggest that the ethical standards of some people decrease when they walk in the office door....

Four ethics links is a review of recent stories in applied ethics. This week: Business Ethics for Recent College Grads, Twitter and Corporate Ethics Agreements, The Ethics of Criticism, and Ethics in Chinese Science.

1. Workplace Ethics: The High Cost of Compromise

Kirk O. Hansen recently made some interesting observations about the ethical challenges that will face new college graduates. Facing the current, difficult economy, Hansen claims, will "make ethical decisions even tougher."

Because it has been difficult this year to land any job, new graduates will be less likely to resist, less likely to put their new position at risk in order to do the right thing. And that threatens to undermine the ethical character of this year's graduates at the outset of their careers.

A rethinking of the MBA, and a redesign of a water transport device for developing countries.

Good news this week for MBAs like myself who believe that business skill can be used to do good: we came across a trend towards more ethical MBAs, after last Spring's Harvard MBA class signed a sort of businessperson's version of the doctor's traditional Hippocratic Oath. Since then, schoolsacrossthecountry are adding ethics courses to the curriculum, and MBAs are being encouraged to see the degree as a tool for effective management, not just a ticket to a high paying job.

It isn't yet clear to me exactly how (and if) ethics can be taught to MBAs, however, I'd like to explore this further in future posts. But right now I'd like to turn your attention to an inspiring MBA who is harnessing her business expertise to bring water to developing countries, by helping to spread a simple design, which addresses the root causes that are trapping families and entire communities in poverty.

The Hippo has been in existence for 15 years, originally designed by two South African men and currently produced in South Africa, to facilitate the safe and efficient transport of water in the developing world. The original design cost $100 per unit, and holds approximately 24 gallons of water. For families in South Africa and many other parts of the developing world, water must be fetched multiple times throughout the day, the traditional methods (gerricans and buckets) only holding about 5-8 gallons at any time. The Hippo's volume and ease of use allows households to spend less time fetching water, and more time going to school, running businesses, and with their families.

Everything's fine today, that is our illusion. -- Voltaire

As you no doubt know by now, earlier this month, 25-year old Sun Danyong, an employee of Foxconn -- the company that manufactures the iPhone for Apple -- was apparently driven to commit suicide as he was subjected "unbearable interrogation techniques" by his employer's internal security group. Danyong was under investigation for losing a prototype device of a forthcoming iPhone.

As this incident unfolded, we were naturally following it, preparing to write a lengthy post for BlogLESS detailing the dense web of ethically unattractive business practices that combined to manufacture this grossly tragic event.

Given the magnitude of the tragedy, though, pontificating about business ethics, Apple or Foxconn seemed, if not misplaced, then at least unsavory. What luck for us all then, that Fake Steve Jobs delivered one of his best posts ever, finding an appropriate path to the heart of the problem without degenerating too far into the preachiness or grandstanding that a more sober response threatened.

(For those four of you who are currently reading BlogLESS and have never heard of FSJ -- first of all, god bless you. Secondly, you're in for a treat. FSJ runs a Steve Jobs parody blog, The Secret Diary of Steve Jobs -- tagline: "I will restore your sense of childlike wonder. There is nothing you can do to stop me." -- which, under normal auspices, can be very funny.)

Back to the matter at hand, though. I'll now quote the July 21 entry from The Secret Diary of Steve Jobs:

Well, this is the world we are living in. These are the people we are dealing with. This is how we have to deal with them. We can't make these products in the United States. Nobody could afford to buy them if we did...

This time it's getting to me. It really is. For a long time I couldn't stop crying. Since then I've just been sitting in my office with the blinds shut. I can't stop thinking about it. It's why I wasn't on the earnings call today. I'm just numb. I'm asking myself, Is this really worth it? Is this what I want to do with my life? Can I live with myself?

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We interrupt your regularly schedule programming for a brief and personal story about how a classy move by Media Temple turned lemons into lemonade.

Some of you may have noticed that BlogLESS was down over this weekend. DLB hosts with California-based Media Temple and we were one of what must have been many thousands of websites which experienced an almost two-day outage this weekend.

Naturally, we were a bit miffled about this while it was happening. Then, to their everlasting credit, Media Temple sent us this email early Tuesday morning:

On Saturday, February 28 2009, you may have experienced trouble accessing your website and email. ... By the end of the weekend we were able to successfully restore availability...

Keeping with our commitment to service accountability, (mt) Media Temple is issuing you full credit for this month's service. We apologize that these events have occurred and we would like to ensure you that our staff is taking immediate action to help prevent this matter from occurring in the future.

Their website says that their total refunds are in the neighborhood of $100,000. While this is a big outlay, we are sure that it will pay off for them in the long run. We also wanted to offer our personal thanks and congratulations on a tough situation beautifully handled.

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